Monthly Archives: January 2014

Plan Progresar: más de 5.500 jóvenes ya se anotaron en Córdoba

A una semana de lanzado el programa nacional dirigido a personas de 18 a 24 años que deseen iniciar o continuar sus estudios, 5.507 jóvenes cordobeses ya se anotaron para ser beneficiarios del programa. En tanto, a nivel nacional ya son casi 120 mil las solicitudes.

Plan Progresar: más de 5.500 jóvenes ya se anotaron en Córdoba

Audit queries mystery offshore accounts as CMC prepares exit

It is still unknown what amounts of CMC Holdings Limited cash is held in offshore accounts, ostensibly stashed away by former directors.

Dubai-based Al Futtaim Auto and Machinery company has offered Sh13 per share to take over CMC Holdings

Dubai-based Al Futtaim Auto and Machinery company has offered Sh13 per share to take over CMC Holdings

This situation remains so only months before conclusion of a takeover bid between CMC and Al Futtaim Auto and Machinery company — a Dubai-based conglomerate. The cash offer closes on February 14th, 2014, after which CMC will be delisted, making it difficult to disclose any more information concerning these hidden offshore accounts.

The company acknowledges that it does not have details on certain offshore bank accounts and has therefore not included this item on financial statements for year ended September 30th, 2013.

“Investigations into source of these funds held in these accounts, balance in the accounts, ownership and whether any amounts can be repatriated back to the company, are still ongoing,” said Joel Kibe-CMC Holdings Group Chairman in a statement released yesterday.

Paper trail

Secrets surrounding these hidden offshore accounts could remain buried for decades to come. This is because the paper trail on transactions involving operation of offshore accounts has gone cold or disappeared altogether.

Take the example of a cover letter written on February 8th, 2000 from one S.W Lewis, operating the company’s offshore account in Cyprus, to the then director at CMC Jeremiah Kiereini.

The letter requests Kiereini to ensure that directors of CMC sign three loan agreements, which are up for renewal. The sums involved include a £500,000 loan to Kenya, which appears to have been secured through a private company, CMC.

Both Kiereini and Forster have since left CMC while Lewis, who operated the firm’s offshore accounts in Cyprus, has reportedly passed on.

While the motor dealer has been a major supplier of Government vehicles, the entry of China and other suppliers has tipped the scales against it. Accusations have been rife that some of former CMC directors were involved in fraudulent activities, including fund diversion to offshore accounts.

In the financial year ended 30th September 2013, CMC recorded a decline in gross profits to Sh2.4 billion, up from Sh2.5 billion recorded in 2012.

Its pre-tax profit also fell from Sh232.3 million in 2012 to Sh199.8 million during the same period.

CMC has had to pay Sh25 million to LandRover Jaguar staff who had to be made redundant when the firm lost this franchise.

CMC Motors Group Limited has since lost exclusive distribution rights of Jaguar and Land Rover, leaving it with Ford, Mazda, Volkswagen, Suzuki, Maruti, Nissan Diesel and MAN range of trucks (medium and heavy commercial) and buses.

It also distributes Iveco, Bobcat, New Holland and Case tractors and an extensive range of farming implements — from ploughs through to irrigation equipment.

In accordance with  Take-over Regulations, the Capital markets Authority has extended the suspension of trading of CMC shares at the Nairobi Securities Exchange until when the offer lapses.

By Jackson Okoth, The Standard

Audit queries mystery offshore accounts as CMC prepares exit

Pakistan bank set to acquire Kenya’s Middle East Bank

Pakistan’s MCB Bank is on the verge of acquiring Kenya’s Middle East Bank at undisclosed fee in a development bound to bolster intense competition for deposits among Kenya’s big banks.

Pakistan’s MCB Bank is in talks to buy Kenya’s small lender Middle East Bank.

Pakistan’s MCB Bank is in talks to buy Kenya’s small lender Middle East Bank.

This comes after completion of due diligence work on the Kenyan lender, which kicked off in mid November last year.

Sources revealed that a deal has been reached for Pakistan’s fourth largest bank to make an entry into the Kenyan banking market through the acquisition of one of Kenya’s small banks.

The Pakistan bank reportedly owns Sh612 billion worth of assets, more than Kenya’s largest lender by assets, which is KCB’s Sh385 billion.

The bank also operates in Sri Lanka and has indirect presence in Dubai, Bahrain, Azerbaijan and Hong Kong. It deals both in retail and corporate business.

“The buyer and the seller have already agreed but there is still a lot of formalities to be done,” the source said.

Contacted for comment Middle East Bank Kenya Ltd managing director Dhirendra Rana confirmed that negotiations on the proposed acquisition are ongoing but declined to divulge more details saying he is bound by confidentiality agreement.

“I’m not in a position to confirm the details of this transaction. There are on-going negotiations but we have not received any approvals yet. We have also not convened any shareholders’ meeting to approve the transaction and until such a time we get the approvals I’m bound by the confidentiality agreement not to disclose anything,” Mr Rana told the Weekend Business.

Core capital

Middle East Bank (MEB), which is headquartered in Nairobi’s Milimani area, has only four branches in Nairobi and Mombasa.

The bank’s total assets for the nine months period to September 31, 2013 hovered at a measly Sh5.86 billion against total liabilities of Sh4.7 billion.

Net loans and advances to customers stood at Sh3.23 billion compared with Sh2.95 billion in a similar period the previous year.

Loan loss provision increased to Sh26.13 million from Sh17.77 million while gross non-performing loans and advances increased to Sh510 million from Sh71.7 million.

MCB’s acquisition of the Kenyan lender is part of the major realignments that begun taking shape in the banking landscape as Central Bank’s new capital requirements weigh heavily on small players.

Apart from banks having to maintain minimum core capital of Sh1 billion (effective from 31 December 2012 as per the Banking Act), they will also have to observe new capital ratios under the new guidelines. The new guidelines introduce a requirement for a capital conservation buffer of 2.5 per cent over and above the existing core capital and total capital ratios.

This has an impact of increasing minimum core capital from 8 per cent to 10.5 per cent and total capital from 12 per cent to 14.5 per cent. In addition, the computation of risk-weighted assets, which is currently based only on credit risk, will incorporate a charge for market risk and operational risk.

Initially CBK had given a timeline of 18 months to comply with the new capital requirements, but this has now been revised to 24 months, implying January 1, 2015 for the 2.5 per cent conservation buffer and January 1, 2014 for the market risk charges to capital.

The latest has seen some small banks merge while others offer themselves for grabs by foreign lenders.

The move is seen as a strategy to build strong financial muscles to survive the growing competition as well as comply with the new capital requirements that appear to have destabilized the small banks in the industry.

Nigeria’s Guaranty Trust Bank acquired 70 per cent of Fina Bank at a cost of $100 million.

In June 2010, Equatorial Commercial Bank merged with Southern Credit Banking Corporation, creating a new enlarged bank under the Equatorial Commercial Bank brand.

By James Anyanzwa, The Standard

Pakistan bank set to acquire Kenya’s Middle East Bank

Murder most foul in paradise!

From reports coming from a source on Zanzibar’s main island of Unguja it appears that the bodies of a French couple, who intended to settle on the Spice Island and retire there, were found yesterday concealed in a water well on the property they had rented.

UngujaThe two were reported missing two months ago and the search intensified when apparently friends and relatives of the two, through the French mission in Dar es Salaam, increased the pressure on local authorities to get results.

While the circumstances of their death are entirely unclear at this stage, it has been suggested that robbery may have been a motive which led to their murder and police investigations, according to the source, are now focusing on individuals who were in contact with the couple to sell or rent them properties.

Zanzibar, also known as the Spice Island, has had some negative publicity last year when two British girls were subjected to an acid attack, while churches were burned by a small section of radicals seeking to fan religious divisions and hatred.

Fortunately for the tourism industry, on which Zanzibar depends for the 75 percent of overall foreign exchange earnings the island records annually and being a key pillar of economic activity, has not yet taken a downturn as a result of bad publicity over such cases, largely because they are still seen as isolated and not specifically targeting tourists, though not everyone would agree with this conclusion of course.

Murder most foul in paradise!

Where is Kalonzo Musyoka as Muthama, Mutua turf wars rage?

Former Vice-President Kalonzo Musyoka’s reign as Ukambani leader is currently under a huge test.

Alfred Mutua

Alfred Mutua

Members of Parliament are split whether to continue supporting Kalonzo or not given that he has failed to stop the wrangling between Machakos Senator Johnstone Muthama and Machakos Governor Alfred Mutua.

The never-ending political squabbles pitting Mr Muthama against Dr Mutua is mutating into an all-out supremacy battle in Ukambani politics — which does not involve Mr Kalonzo.

Muthama and Mutua, both elected on a Wiper party ticket, have been embroiled in a struggle, which even their party leader Kalonzo has been able to arbitrate.

Mutua’s charge against Muthama has been that the senator, who is a former Kangundo MP and Government Whip in the previous regime, has been frustrating his efforts to initiate development in Machakos.

Muthama has raised issues with the manner in which the county government, led by the former government spokesman, has been handling the county’s finances, accusing the governor of extravagance and getting priorities wrong.

Observers now say the bare-knuckled political battle playing out  is likely to change the politics of the entire Ukambani region altogether.

While Muthama has opted to tackle Mutua by speaking against him in public gatherings, Mutua seems to have adopted a strategy to fight back through proxy. The governor appears to have successfully pulled a large clout of leaders including MPs and Members of County Assemblies (MCAs) to his side from where he has launched a major charm offensive against the outspoken senator.

A case in point is last Thursday when Mutua hosted 15 MPs drawn from Machakos, Kitui and Makueni at Muthama’s home turf Tala to launch ‘Machakos County Comprehensive Security Programme’ where 120 police vehicles were unveiled.

The ceremony would later degenerate into bashing event against Muthama, who was conspicuously absent and somewhat unrepresented.

MPs Itwiku Mbai (Masinga), Dr Victor Munyaka (Machakos Town) and Eng Vincent Musyoka (Mwala) unleashed a scathing attack on Muthama, claiming he does not deserve to be a senator.

“We have given him three months to reform and support our development agenda in Machakos or else we will initiate a legal process to remove him from office,” said Dr Munyaka.

Dr Munyaka also accused Muthama of ‘being dishonest’ with voters for declining to honour his ‘promise to resign’ if Mutua got elected as governor.

“Muthama is even on record saying that he would resign in three days if Mutua got elected as governor, and we are yet to see that happen,” he added.

Mbai and Musyoka said the train of development has left the station and not a single individual would stop it.

The two MPs claimed that the senator has now become a lone ranger by going against the wishes of majority.

“We want to tell him that his schemes won’t work. It is for him to toe the line and join us,” said Eng Musyoka.

By ERASTUS MULWA, The Standard

Where is Kalonzo Musyoka as Muthama, Mutua turf wars rage?